July 2022

Interim Order of the Athens Court of First Instance on the Suspension of the Execution of a Warrant for Foreclosure after the Auction

The interim order of 4/7/2022 of the Athens Single Judge Court of First Instance was published, on the basis of which the execution of a cheque served by the successful bidder after the auction and the preparation of an auction report was suspended. One of the main reasons put forward to justify the invalidity of the auction held was the following: According to Article 966 par. 2B of the Code of Civil Procedure, in case the 3rd auction is also unsuccessful, the auctioneer shall repeat the auction within thirty (30) days, with a first bid price equal to sixty-five percent (65%) of the original bid. Pursuant to the relevant law, the new automatic price reduction provisions shall apply to auctions, whether initial or repeat, the holding of which has been or will be set for a time after 1/1/2022, regardless of the time at which the initial auction was determined. Therefore, auctions that were declared unsuccessful three times in the past due to lack of bidders always with the same initial first bid price or with a bid price higher than 80% of the initial bid price (the third time possibly after a court decision), it is mandatory to consider that the new § 2A will be applicable and therefore the 4th auction in a row will be determined at 80% of the initial first bid price (and not at 65% thereof). This is because the new Article 966 provides for four successive stages in the development of the inferior auctions, the last two of which allow for an automatic gradual reduction of the initial first offer price. A prerequisite for the repetition of the auction at each stage is that the auction of the previous stage must have been unsuccessful and it is not possible to circumvent any of these stages, since the purpose of the provisions is to achieve the highest possible bid. The only case in which § 2B is directly applicable, and therefore a determination at 65%, is where the court had ordered, under the previous form of the article, that the auction be repeated for a third or even a fourth time (after the two attempts to conduct the auction at the original price), setting a first bid price equal to or below 80% of the original price, and the auction, which was set at that price, was also unsuccessful. In the present case, after two unsuccessful auctions had already been held, the auctioneer had applied to the court, under the old law, for a reduction of the first bid price of the auctioned property, on which a decision was issued which actually reduced the first bid price to the amount of EUR 185,000.00, i.e. EUR 5,000.00 more than 80% of the first bid. In this context, a subsequent compulsory auction took place, which was however again unsuccessful. Finally, after three unsuccessful auctions already conducted, the next and last forced auction of the disputed property took place in March 2022, with a first bid price of EUR 146,000, equal to 65% of the originally set first bid price, whereupon the disputed property was awarded to the successful bidder. However, on the basis of the foregoing, it follows that, since the auction which preceded the last auction held and which is the subject of the present action took place following the issue of an injunction reducing the first bid price to a price equal to more than 80%, the new paragraph 2A of Article 966 of the CCP is mandatory, according to which a new auction is to be held with a first bid price equal to 80% of the price initially fixed and, in any event, paragraph 2B of that article, which was incorrectly applied in the present case and which sets the price at 65% of the price initially fixed, does not apply. 

An application for interim measures, and in particular an application for an interim order, is the first step in protecting the owner of a property which has already been auctioned and who wishes to challenge the validity of the auction. 

(for more see here and here)